Internal audit flags fleet accounting and inventory issues; fleet management outlines fixes

The Finance Committee received an internal-audit update and a fleet services audit presentation (item 26) on Dec. 1. The audit identified several control weaknesses and areas for improvement in fleet operations and accounting.

Cola, presenting the internal audit findings, said auditors found: (1) allocation of vehicle acquisition costs that expanded approximately $1,300,000 to the fire apparatus project between 2020 and 2024; (2) two 2024 P‑card transactions that exceeded the city’s $10,000 single-transaction limit (purchases of vehicle parts and auto-body repairs); (3) discrepancies between asset values recorded by fleet and the finance system for assets with additional components; and (4) the need for continuous monitoring of fleet inventory and a return-reconciling process.

Rachel, assistant fleet superintendent, responded that staff had also identified the large allocation issue earlier in the year, have been coordinating with audit staff, and are taking steps to reconcile records. Fleet plans include hiring an operations clerk in the new budget year to focus on parts inventory management and ramping up inventory verification, as well as working with fire department leadership to schedule apparatus replacement and to make the Fire Department whole over coming years. Finance staff said journal-entry and reconciliation work is ongoing to correct transactions identified by the audit.

Alder Revere asked for a summary of management responses; fleet and fire staff described a plan to reconcile records, implement recommended protocols, and present further audit results at the January meeting (the audit program and enterprise risk assessment are scheduled for future updates). There was no committee action on this presentation; staff will return with follow-up reports and corrective accounting entries.